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Terence Corcoran: The new China syndrome

Canadian business joins the push for greater state control

Back on Jan. 25, 2021, at the World Economic Forum’s annual Davos Agenda meeting, a virtual event due to the COVID-19 pandemic, the day’s star performer faced the camera in front of a colourful backdrop image of the Great Wall of China. With his usual benign smile, China’s President, Xi Jingping, delivered a jargon-filled woke globalist speech about the need for “macroeconomic policy co-ordination” to “jointly promote strong, sustainable, balanced and inclusive growth of the world economy.”

The time seemed right for upbeat messages. Chinese stocks were trading at high prices and there was a need to reinforce global optimism in the face of the COVID pandemic, climate change alarmism and other official perils. Xi used the word “inclusive” five times and promised to pursue sustainable development and climate change. Echoing Greta Thunberg, Xi said, “The Earth is our one and only home.”

As for China’s economy, Xi promised to promote institutional opening-up that covers rules, regulations, management and standards. “We will foster a business environment that is based on market principles, governed by law and up to international standards, and unleash the potential of the huge China market and enormous domestic demand.”

The speech was welcomed by Klaus Schwab, guru of the WEF’s global corporatist movement. “We must come together to ensure that we capture the moment and move into the age of collaboration to build a better world.”

It’s been downhill ever since for China’s markets and the global collective of financial corporatists who have been plowing investor funds into Xi’s vision of capitalism with Communist characteristics .

In the few days after Xi’s WEF comments, one of the major indicators of China’s investment market environment — the MSCI China Index of large and medium-sized corporations — topped 13,000. Then came China’s regulatory deluge in contradiction of Xi’s promise at the WEF to deliver market principles. The crackdown on Hong Kong also accelerated, as did attacks on major corporations. Today the MSCI index remains close to 30 per cent below its peak just after Xi’s speech. According to, technical and moving average analyses suggest the index remains a “strong sell.”

That would mean more pain for the world’s investment Sinophiles, a community heavily influenced by herd impulses and a large number of global corporatists who see China’s state capitalism as the glorious path to a new world order.

In that corporatist camp are numerous Canadian executives and corporate leaders, including Dominic Barton, Canada’s current ambassador to China. The National Post’s Tom Blackwell reported Tuesday that Barton — former head of the globalist McKinsey consulting giant — is calling on Canadian business leaders to expand their involvement with Xi’s Communist party power structure. “It’s critical that Canadian firms seize opportunities where they exist and take advantage of the continuing economic rise of Asia and China.”

Speaking to the Canada China Business Council (CCBC) at a recent conference co-sponsored by RBC and Ottawa’s Export Development Canada, Barton said that “regardless of one’s outlook on it” China cannot really be ignored. “Where trade is concerned, our companies need to engage in support of our economic interests while being true to our values.”

Another partner in the event was Trivium China, an economic consultancy that seems dedicated to defending the mass interventionism now underway as part of the Chinese Communist Party’s (CCP) latest five-year plan. The government’s unilateral crackdown on tech firms, for example, was hailed by Trivium as a welcome “tech wreck” that saw CCP agencies “bring down the hammer” on monopolies, systemic abuse, uncompetitive practices and a host of other problems in the fintech and related sectors. Would these be the monopolies the CCP created?

With his comments, Barton joins a long list of international corporatists from the World Economic Forum (WEF) school of business management that encourages business leaders to align with the prevailing statist orthodoxy, no matter how anti-freedom, ant-markets and authoritarian it might be. The Build Back Better slogan, promoted by the WEF and the United Nations, has been adopted by leaders everywhere, including Joe Biden, Justin Trudeau and China’s Xi.

The first priority is the need to suspend principles. As Barton said at the CCBC meeting, Canadian business leaders should get into China “regardless of one’s outlook on it.”

It’s an old playbook, one that corporate executives in Canada and around the world routinely adopt to follow the money. The CCBC itself was founded by Paul Desmarais, the late Quebec business leader who created Power Corporation. The current CCBC board includes Canadian legal and corporate officials such as Power’s Olivier Desmarais; Scott Brison of BMO Capital Markets: former politicians Martin Cauchon and James Moore representing law firms; an SNC-Lavalin executive; and officials from Sun Life, CIBC, Brookfield, RBC and other enterprises with China plans and ambitions.

So how do members of the Canada China Business Council view the top-down Chinese communist economic model? With calm and detached ambition, judging by the council’s new report on China’s latest five-year economic plan, the 14th since the first plan issued in 1953 under Mao Zedong’s dictatorship. The new plan, known as the 14th FYP, outlines major shifts in policy that will require Canadian businesses get ready for massive adaptation and compromise with the all-powerful regulatory state.

“In China,” says the CCBC report, “the government policy determines market outcomes.” Isn’t communism great?

To deal with these government-determined market outcomes, “foreign companies perform best in China when they understand policy trajectories and craft their business strategies accordingly.”

Canadian firms will also “need to take extra care to avoid running afoul of tightening national security regimes and become comfortable with a higher degree of government scrutiny. The 14th FYP is the definitive document for understanding the key trends that will shape Chinese economy in the short to medium-term future. In order to succeed in China, Canadian companies will need to firmly grasp both the opportunities and challenges presented by the new policy directions outlined in the 14th FYP and craft their China strategies accordingly.”

There is no doubt China, with close to 1.5 billion people and an economy that has been semi-liberalized with the introduction of some market forces and limited economic and political freedom, will continue to expand in years to come.

The underlying implication of the CCBC analysis of the Chinese economy, however, is that its value and strength come from the country’s neo-fascist economic model rather than from the liberal economic reforms introduced in recent decades.

The thinking trend at the CCBC voiced by Barton effectively puts faith in greater government authority, planning and control to produce economic growth and well-being. It’s a growing belief backed by Xi Jinping in China, but also around the world, including in Canada.

Source: Financial Post